Putting up a business is not a game of chance. It is not a win or loss activity. However, there are always risks in business. Some of these can be avoided. Others cannot be avoided like natural calamities, but their effects can be minimized.

Planning can eliminate business risks because ir carefully studies the competence, interest and resource of the entrepreneur against the needs of consumers, together with the presence of competitors. Through marketing research or feasibility study, the entrepreneur can determine whether it is profitable to set up a certain kind of business or not.

Planning can minimize costs of production. The resources of production such as money, materials, machines and manpower are properly used and scheduled according to plan. The entrepreneur monitor and controls every aspect of the business operations no prevent unnecessary wastes. This results to economy and efficiency, Without planning production inputs are wasted more often than not.

Planning can detect the weakenesses of the business operations. In planning goals and objectives are formulated. Alternative strategies are designed on how to attain the objectives and goals. The various resources or inputs are also indicated to support the strategies. If the goals and objectives have not been accomplished according to time frame, there is something wrong with the operation. The entrepreneur can then reevaluate his planning.

Successful planning is highly dependent on adequate and accurate informaion. This is much needed in knowing the needs of consumers, and the strengths and weakenesses of competitors. Such date give the entrepreneur the ability to make the right gaols and effective strategies. In addition, any entrepreneur who  follows the principles of planning is most likely to succeed in his business.